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Abstract

Project cost escalation is a major problem for State Highway Agencies (SHA).
This problem is evident in cost estimating procedures that may not promote consistency
and accuracy of costs over the project development process. The research proposes that
a relationship exists between applying good estimating practices and minimizing cost
escalation from the initial planning estimate to the engineer??s estimate at final design.
The objective of this research is to develop a preliminary list of strategies, methods, and
tools for project cost estimation practices aimed at achieving greater consistency and
accuracy between the project development phases.
A literature review was conducted that assisted in identifying factors that lead to
the cost escalation of projects. The information from the literature was used to discover
the core estimating assumptions that are the root causes behind cost escalation and lack
of project estimate consistency and accuracy. After the cost escalation factors were
determined, interviews with SHAs were conducted that lead to identifying unique and/or
innovative approaches that will aid the SHAs in overcoming the cost escalation factors.
The main methodology used to develop a potential list of strategies, methods,
and tools was first focused on linking strategies to causes of cost escalation. Global
strategies were identified by means of this approach. Methods and tools that would
likely be effective in implementing the strategies are therefore directed at mitigating root
causes of estimate problems in a focused approach. The strategies, methods, and tools
are aligned with the project development phase where they would be implemented.
Thus, a preliminary list of strategies, methods, and tools is provided in this study.